In an attempt to win back customers, the retailer toned down its image — a move that
ultimately drove away American Apparel's fan base.

"I think the biggest error was not adjusting with the times
in terms of both brand image and ranges," Neil Saunders, CEO of
consulting firm Conlumino, wrote in an email to Business
Insider.

A look at the brand's Instagram shows rising necklines and looser-fitting
clothing; the tone has been stripped of provocativeness, which is
what set the brand apart in the first place. This, according to
experts, appears to represent a lack of
identity.

A photo posted by American Apparel (@americanapparelusa) on Oct 3, 2015 at 11:28am PDT on
Oct 3, 2015 at 11:28am PDT

In order to save itself from becoming another ghost in the retail
graveyard, American Apparel will need to find its voice and what
it stands for again.

"Big questions remain around both brand and
product. On the former, it is still not clear what American
Apparel is trying to change to. We know that the company is
looking to be more ethical in its marketing, relying far less on
the sexual overtones it has used in the past. However, as welcome
as this may be, it does mean that a fresh viewpoint is needed in
order to give the company a clear and cohesive brand image,"
Saunders wrote in a note.

"If you don't stand for something, you fall for anything.
And what you see right now ... Abercrombie, what they've done, is
they're in eternal drift mode," Erich
Joachimsthaler, CEO of consulting firm Vivaldi Partners,
said to Business Insider earlier this year.

"If you think about it, everything that made them
different, they have removed," he said. "But they haven't
replaced it with anything."

But even though Abercrombie & Fitch may be struggling to find
its identity, it at least has adapted to evolving styles — its
most recent collection showed signs of a renaissance for the brand.

A photo posted by American Apparel (@americanapparelusa) on Sep 29, 2015 at 3:42pm PDT on
Sep 29, 2015 at 3:42pm PDT

American Apparel will have to scramble and adapt rapidly.

"While the turnaround will be tough, we do have
confidence that Ms. Schneider [Paula Schneider, American
Apparel's current CEO] understands the issues and has a plan of
action," Saunders wrote. "Indeed, at the last set of quarterly
results she clearly outlined a number of initiatives – including
streamlining costs, new fall collections, and the strengthening
of the leadership team – in order to help revive sales and
profits."